Case study on Problem Analysis and Decision Making

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Decision making can be regarded as the mental processes (cognitive process) resulting in the selection of a course of action among several alternatives. Every decision making process produces a final choice.The output can be an action or an opinion of choice.

Problem Analysis vs Decision Making:

It is important to differentiate between problem analysis and decision making. The concepts are completely separate from one another. Problem analysis must be done first, then the information gathered in that process may be used towards decision making.

Problem Analysis

• Analyze performance, what should the results be against what they actually are

• Problems are merely deviations from performance standards

• Problem must be precisely identified and described

• Problems are caused by some change from a distinctive feature

• Something can always be used to distinguish between what has and hasn't been effected by a cause

• Causes to problems can be deducted from relevant changes found in analyzing the problem

• Most likely cause to a problem is the one that exactly explains all the facts

Decision Making

• Objectives must first be established

• Objectives must be classified and placed in order of importance

• Alternative actions must be developed

• The alternative must be evaluated against all the objectives

• The alternative that is able to achieve all the objectives is the tentative decision

• The tentative decision is evaluated for more possible consequences

• The decisive actions are taken, and additional actions are taken to prevent any adverse consequences from becoming problems and starting both systems (problem analysis and decision making) all over again

Decision Making Techniques:

Listing the advantages and disadvantages of each option, popularized by Plato and Benjamin Franklin.

Choosing the alternative with the highest probability-weighted utility for each alternative (see Decision Analysis) or derivative Possibilianism: Acting on choices so as not to preclude alternative understandings of equal probability, including active exploration of novel possibilities and emphasis on the necessity of holding multiple positions at once if there is no available data to privilege one over the others.

Accepting the first option that seems like it might achieve the desired result

Acquiesce to a person in authority or an "expert", just following orders

Flipping a coin, cutting a deck of playing cards, and other random or coincidence methods

Prayer, tarot cards, astrology, augurs, revelation, or other forms of divination

Decision-Making Stages

There are four stages that should be involved in all group decision making. These stages, or sometimes called phases, are important for the decision-making process to begin

1) Orientation stage- This phase is where members meet for the first time and start to get to know each other.

2) Conflict stage- Once group members become familiar with each other, disputes, little fights and arguments occur. Group members eventually work it out.

3) Emergence stage- The group begins to clear up vague in opinions is talked about.

4) Reinforcement stage- Members finally make a decision, while justifying themselves that it was the right decision.

Decision-Making Steps / Models

When in an organization and faced with a difficult decision, there are several steps one can take to ensure the best possible solutions will be decided. These steps are put into seven effective ways to go about this decision making process.

Step 1: Identify the decision to be made. You realize that a decision must be made. You then go through an internal process of trying to define clearly the nature of the decision you must make. This first step is a very important one. 

Step 2: Gather relevant information. Most decisions require collecting pertinent information. The real trick in this step is to know what information is needed, the best sources of this information, and how to go about getting it. Some information must be sought from within yourself through a process of self-assessment; other information must be sought from outside yourself-from books, people, and a variety of other sources. This step, therefore, involves both internal and external "work". 

Step 3: Identify alternatives. Through the process of collecting information you will probably identify several possible paths of action, or alternatives. You may also use your imagination and information to construct new alternatives. In this step of the decision-making process, you will list all possible and desirable alternatives. 

Step 4: Weigh evidence. In this step, you draw on your information and emotions to imagine what it would be like if you carried out each of the alternatives to the end. You must evaluate whether the need identified in Step 1 would be helped or solved through the use of each alternative. In going through this difficult internal process, you begin to favor certain alternatives which appear to have higher potential for reaching your goal. Eventually you are able to place the alternatives in priority order, based upon your own value system. 

Step 5: Choose among alternatives. Once you have weighed all the evidence, you are ready to select the alternative which seems to be best suited to you. You may even choose a combination of alternatives. Your choice in Step 5 may very likely be the same or similar to the alternative you placed at the top of your list at the end of Step 4. 

Step 6: Take action. You now take some positive action which begins to implement the alternative you chose in Step 5. 

Step 7: Review decision and consequences. In the last step you experience the results of your decision and evaluate whether or not it has "solved" the need you identified in Step 1. If it has, you may stay with this decision for some period of time. If the decision has not resolved the identified need, you may repeat certain steps of the process in order to make a new decision. You may, for example, gather more detailed or somewhat different information or discover additional alternatives on which to base your decision.

Assessing Risk in Decision Making:

Before define the Assessing Risk in Decision Making , we have to know about assessing of risk.

Assessing Risk: Risk assessment is a step in a risk management procedure. Risk assessment is the determination of quantitative or qualitative value of risk related to a concrete situation and a recognized threat (also called hazard). Quantitative risk assessment requires calculations of two components of risk: R, the magnitude of the potential loss L, and the probability p, that the loss will occur


Risk assessment consists in an objective evaluation of risk in which assumptions and uncertainties are clearly considered and presented. Part of the difficulty of risk management is that measurement of both of the quantities in which risk assessment is concerned - potential loss and probability of occurrence - can be very difficult to measure. The chance of error in the measurement of these two concepts is large. A risk with a large potential loss and a low probability of occurring is often treated differently from one with a low potential loss and a high likelihood of occurring. In theory, both are of nearly equal priority in dealing with first, but in practice it can be very difficult to manage when faced with the scarcity of resources, especially time, in which to conduct the risk management process. Expressed mathematically,

Risk assessment is a in an financial point of view.

Financial decisions, such as insurance, express loss in terms of dollar amounts. When risk assessment is used for public health or environmental decisions, loss can be quantified in a common metric,such as a country's currency, or some numerical measure of a location's quality of life. For public health and environmental decisions, loss is simply a verbal description of the outcome, such as increased cancer incidence or incidence of birth defects. In that case, the "risk" is expressed as:

If the risk estimate takes into account information on the number of individuals exposed, it is termed a "population risk" and is in units of expected increased cases per a time period. If the risk estimate does not take into account the number of individuals exposed, it is termed an "individual risk" and is in units of incidence rate per a time period. Population risks are of more use for cost/benefit analysis; individual risks are of more use for evaluating whether risks to individuals are "acceptable"....

Assessing Risk in Decision Making

Because planned actions are subject to large cost and benefit risks, proper risk assessment and risk management for such actions are crucial to making them successful.

Since Risk assessment and management is essential in security management, both are tightly related. Security assessment methodologies like CRAMM contain risk assessment modules as an important part of the first steps of the methodology. On the other hand, Risk Assessment methodologies, like Mehari evolved to become Security Assessment methodologies.

Assess the Risk in workplace:

Following are the five stapes by which we can identfy/assess the risk in our workplace.

Identify the hazards

Decide who might be harmed and how

Evaluate the risks and decide on precaution

Record your findings and implement them

Review your assessment and update if necessary

Step 1: Identify the hazards:

First we need to work out how people could be harmed. When you work in a place everyday it is easy to overlook some hazards. Following are the few points for identify the ones that matter:

Walk around

Ask your employees

Visit the HSE website

Check manufacturers' instructions or data sheets

Check accident and ill-health records

Remember to think about long-term hazards to health

Step 2: Decide who might be harmed and how:

For each hazard we need to be clear about who might be harmed; it will help us identify the best way of managing the risk. That doesn't mean listing everyone by name, but rather identifying groups of people (eg 'people working in the storeroom' or 'passers-by').

Step 3: Evaluate the risks and decide on precautions:

Having spotted the hazards, we then have to decide what to do about them. The law requires we to do everything 'reasonably practicable' to protect people from harm. we can work this out for yourself, but the easiest way is to compare what we are doing with good practice.

Step 4: Record your findings and implement them:

Putting the results of our risk assessment into practice will make a difference when looking after people and our business.

Writing down the results of our risk assessment, and sharing them with our staff, encourages them to do this. If we have fewer than five employees we do not have to write anything down, though it is useful so that we can review it at a later date if, for example, if something changes.

when writing down our results, keep it simple, for example 'Tripping over rubbish: bins provided, staff instructed, weekly housekeeping checks', or 'Fume from welding: local exhaust ventilation used and regularly checked'.

We do not expect a risk assessment to be perfect, but it must be suitable and sufficient. As illustrated by our example risk assessments, we need to be able to show that:

A proper check was made;

We asked who might be affected;

We dealt with all the obvious significant hazards, taking into account the number of people who could be involved;

The precautions are reasonable, and the remaining risk is low; and

We involved our staff or their representatives in the process

Step 5: Review your risk assessment and update if necessary:

Few workplaces stay the same. Sooner or later, you will bring in new equipment, substances and procedures that could lead to new hazards. It makes sense therefore, to review what you are doing on an ongoing basis. Every year or so formally review where you are to make sure you are still improving, or at least not sliding back.

Look at your risk assessment again. Have there been any changes? Are there improvements you still need to make? Have your workers spotted a problem? Have you learnt anything from accidents or near misses? Make sure your risk assessment stays up to date.

When you are running a business it's all too easy to forget about reviewing your risk assessment - until something has gone wrong and it's too late. Why not set a review date for this risk assessment now? Write it down and note it in your diary as an annual event.

During the year, if there is a significant change, don't wait: check your risk assessment and where necessary, amend it. If possible, it is best to think about the risk assessment when you're planning your change - that way you leave yourself more flexibility.